HELENA (KPAX) - Gov. Greg Gianforte and the state's largest public employee unions announced Friday a new state pay plan for unionized employees.

The deal negotiated with the Montana Federation of Public Employees and the American Federation of State, County and Municipal Employees includes wage increases, health benefit cost freezes, one-time payments, and other far-reaching contractual changes, according to news release from both sides.

The agreement includes a $1.50 per hour or 4% raise—whichever is greater—on July 1 each year of the upcoming biennium. Single members’ out-of-pocket health benefit contributions, copay amounts, deductibles, and co-insurance costs will not increase through 2025.

Additionally, one-time payments prorated to a 40-hour work week and worth up to $1,040 will be provided to every employee. The agreement also provides increased meal per diems and the addition of an annual flexible holiday, which will replace every other year’s Election Day holiday.

The parties also agreed to continue discussions for larger pay hikes in areas with higher cost of living. They're also aiming to standardize contract language across state agencies.

The state pay plan, which is negotiated every two years in advance of the Montana legislative session, must be approved by the Legislature before it's implemented.

“This agreement reflects our commitment to our hardworking state employees for all they do for Montanans,” Gianforte said in a statement. “As Montanans and all Americans face higher prices and historic inflation, this package will help ensure we retain and recruit qualified, dedicated public employees to serve Montanans. We all came to the table and negotiated in good faith, and I appreciate the union’s collaboration with my team. Together, we negotiated a fair, fiscally responsible deal that provides state employees with competitive compensation, and I look forward to working with the legislature and the unions to approve the plan.”

Union leaders also praised the deal.

“This pay plan agreement is a testament to our bargaining team’s tireless commitment to their fellow MFPE members,” MFPE President Amanda Curtis said in a statement. “We recognize Governor Gianforte for his good faith bargaining and his willingness to respond to the needs of the workforce that keeps Montana great. This agreement is hard-bargained and months in the making. I look forward to working with the governor to secure an overwhelming and bipartisan passage through the 2023 Legislature.”

“We appreciate Governor Gianforte for respecting our contracts and investing in state workers,” added AFSCME Executive Director Timm Twardoski. “Too many state workers are leaving for employment elsewhere. Today, Montana recognizes the value of state employees and we begin the hard work of making sure they’re able to continue living here and working on our behalf.”